'Dormant accounts': The £850m that lies forgotten just when we need it the most
Chiara Cavaglieri and Julian Knight see how to trace cash you may have lost touch with in a bank or investment
Sunday 15 February 2009
When finances are as tight as they are at the moment, it is difficult to believe anyone could lose track of their cash. However, that is precisely what millions of Britons do all the time. From current to savings to business accounts, official figures suggest we have simply forgotten about up to £850m of our own money.
It won't be lying neglected and unused for long. From the middle of this year, the Government has decided, money held in these "dormant accounts" will be siphoned into a central fund for distribution to good causes. The Big Lottery Fund is expected to be in charge of the handout.
An account is judged to be dormant if there has been no activity in it, or contact with the client, for 15 years. Normally, account holders lose contact due to a change of address, simply being too busy or, in some cases, death. Other people hold accounts they simply aren't aware of – particularly savings products set up by relatives on behalf of children.
The message is if you think you might have one of these accounts is to act quickly and try to track down the money before it is handed out. This is not a "use it or lose it" ultimatum as the law holds that dormant cash will always belong to the original account holders. But if they want it back, they will have to apply to the bank or building society or through Mylostaccount, and that may prove a long-winded process. What's more, savers are being urged to trace their cash as soon as possible as it's very likely to be languishing in a low-paying account.
Tracing your financial history can now be done with relative ease and speed. One of the best places to start is Mylostaccount.org.uk, a joint venture between three sponsors: the British Bankers' Association (BBA), the Building Societies Association (BSA) and National Savings & Investments (NS&I). It's just over a year old, and almost a quarter of a million people have used the service so far, although there are no figures available for how much cash has actually been reunited with British savers.
Mylostaccount combines the search facilities of all three organisations, giving individuals a one-stop shop for tracing "lost" money. Even accounts held with banks and building societies that now trade under a different name can be found in the database.
The service says it will get back to users inside three months with details of dormant accounts, and that it puts claimants directly in touch with the bank or building society. "Just as we now use the web to research our family histories, Mylostaccount helps us to trace our financial histories," says Angela Knight, chief executive of the BBA. "It is important to recognise that your money is always yours, even if you have lost touch with it. If it resides in a bank account, there are records that can link you to it, and this means Mylostaccount can find it."
Several banks have also made conscious efforts to help. So far, for example, the Halifax and Lloyds TSB have reunited their customers with £23m. However, they reckon there is at least another £93m left in dormant accounts that they manage. "We're going to be running an advertising campaign nationally and regionally to encourage more people to check if they have money in any old accounts," says Nathan Wallis, a spokesman for the Halifax. Separately, HSBC has reunited 3,500 customers with more than £5.5m since launching its own national advertising campaign in September last year.
But set against the estimated £850m dormant-account pot, such figures barely make a dent. It seems inevitable that many account holders will fail to re-establish contact with the relevant bank or building society before their cash is siphoned off into the distribution fund.
While schemes such as these cover dormant accounts in banks and building societies, they do not apply to other kinds of assets, such as pensions, share dividends, life insurance policies and investment funds. This is where the Unclaimed Assets Register, an independent financial search service, can come in. And according to the UAR, the inclusion of investments of this nature sends the total amount of unclaimed assets soaring to £15.3bn.
The UAR sees itself as complementing Mylostaccount. "Our service quite neatly complements it in that we cover other sorts of assets," says James Jones, consumer education manager at the UAR. "We provide a portal where consumers can come to us if they think they've lost touch with virtually any investment – not just the narrow number covered by the dormant account legislation."
Yet unlike Mylostaccount, the UAR is not a free service; customers have to pay £25 for every search of the database. Nonetheless, with 10 per cent of searches successful and an average of £6,000 reunited with those claimants, the register could be a worthwhile place to look.
If you're ready to put in the legwork, you can seek out any asset free of charge by going directly to the host of the relevant organisation. For occupational and personal pensions, you can contact the Pension Service (Thepension service.gov.uk), which provides an online tracing service. And you can go looking for any unit or investment trusts you think you might hold at the Investment Management Association (Investmentuk.org) and Association of Investment Companies (Theaic.co.uk).
When searching for lost money, always give as much information as possible, including maiden names where appropriate, all previous addresses and, of course, any account details.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Cyclist in Russia narrowly misses being hit by car and lorry
- 2 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 3 What are your fingerprint words?
- 4 Gary Lineker involved in Twitter row after presenter rubbishes claims he will be warned by BBC over foul-mouthed tweets
- 5 Pink Floyd new album: Band unveil cover art for first record in 20 years
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
Labour Party conference: Ed Balls to set out plan to freeze child benefit to balance books
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Day In a Page
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green